Markets & Finance

First Albany Cuts Wireless Facilities to Neutral


First Albany downgraded Wireless Facilities (WFII) to neutral from strong buy.

Analyst Frank Marsala says second-quarter results were in line, but he says the third-quarter guidance was lower than his and consensus estimate. He says the wireless-network services provider plans to restate its 2000-03 financial results to accrue for certain foreign-tax issues. He says management doesn't believe the restatement will affect reported 2004 operating results, but is unable to rule it out until the review is completed.

Marsala downgraded mostly on this uncertainty. Management, he says, said top-line results were impacted by Cingular's sale of its California assets to T-Mobile, as well as the impact of Sarbanes-Oxley expenses. He notes the 39 cents to 43 cents 2004 earnings per share guidance was cut to 37 cents to 38 cents. He cut his 49 cents 2005 earnings per share estimate to 41 cents, and trimmed the $18 target to $7.


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